‘It might be a short-term Band-Aid’; Economists unsure if forcing a return to work is the right move

Local News

HARLINGEN, Texas (KVEO) — Governor Greg Abbott announced Monday Texas would no longer be giving additional COVID-19 unemployment benefits starting June 26.

Governor Abbott released a statement in which he said that he hoped to take away the additional unemployment benefits will increase the number of people seeking jobs.

An economics professor at the University of Texas Rio Grande Valley (UTRGV) Maroula Khraiche said the additional $300 unemployment benefit that people are slated to receive until September might not be the only reason people aren’t returning to work.

“The matching between employers and employees seems to be at a disconnect here. So there’s a mismatch between the jobs available and the kind of jobs that people kind of want to have,” said Khraiche.

Khraiche said that the move might be premature as some people still are hesitant to return to the workforce during the pandemic.

She added that removing the additional benefit will make more people look for jobs, but that doesn’t mean they’ll stay there.

“So, in the short run it’s a good idea, you can go back to work, but in the long run, if the match between the employer and the employee is not optimal, then in the long run we might see unemployment going back up,” Khraiche said.

The situation on the job front is still very fluid. Khraiche said that stimulus checks that are still being mailed by the IRS are another contributing factor to worker hesitancy.

It could also be too soon since things started opening up to see those improvements reflected in hiring.

“Employment is always sluggish to rebound. So, when we see other indicators going up and improving, employment seems to lag behind,” said Khraiche.

KVEO spoke to owners and managers of several businesses in Harlingen, and they gave mixed signals about what their hiring process had been like the past few months.

Several chain franchise stores confirmed that they had had trouble getting new hires, but they couldn’t go on record due to corporate policies.

Local restaurants and coffee shops appeared to fare better than their national chain counterparts.

The manager for La Playa Mexican cafe in Harlingen, Pablo Chau, said they struggled to get applicants.

“[The] last two months, it was hard for us to get anyone in the world to apply, but it’s got better. We’re really on the track of we got a good crew now.”

Ashley Garcia, who co-owns Bandera Coffee, said that they never had a problem attracting potential employees, even during the height of the pandemic.

“Right, if anything, we have a lot of people reaching out to try and get on board here,” said Garcia.

Texas will become the 17th state to stop the additional federal unemployment insurance.

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